Sebi's legal department is currently busy looking into the specific issues and what powers the regulator has to take action given the facts of the case which have emerged.

"Several facts have emerged over the past few days. Our legal department is now examining the issue and what can be done about it", a top Sebi official told The Financial Express.

When contacted, Sebi chairman DR Mehta, who is slated to go to New Delhi on Tuesday to appear before the Parliamentary committee on finance, declined to comment on the matter and merely quipped: "As you will agree, the Parliamentary committee is more important to us than the Bombay Dyeing-Bajoria case".

Sebi is very upset at being dragged into the public faceoff between the company and the jute baron, and feels it cannot be rushed into taking a decision on such a sensitive affair, more so since it is a quasi-judicial body.

Besides, it is now in a fix since the matter has turned into a verbal duel with Mr Bajoria sticking to his stand that he had sent a letter to the company informing them about the 5 per cent acquisition and Bombay Dyeing refuting that contention.

"It is Mr Bajoria's word against the company's", Sebi officials pointed out, adding that both sides needed to be verified. The regulator is now awaiting details from Mr Bajoria on how much he actually holds with persons acting in concert.

The issue has been made tougher for Sebi since there are three versions coming up: one, the question of when he actually crossed 5 per cent and whether he informed the company at that point. Two, his letter claiming he had 12.79 per cent (Bombay Dyeing claims its latest data shows him having over 11 per cent), and three, whether he crossed the 15 per cent trigger with persons acting in concert.

"It has been reported that he has crossed 15 per cent if his associates' holdings are taken. We have to ascertain from him whether he actually said that," regulatory officials said. However, it now appears that the regulator may take some important steps in the coming days with its legal team now looking into the matter. Much will also depend on the reply Mr Bajoria gives to Sebi on how much he actually controls in the Mumbai-based company.